In February I provided a 1 month update for the solar panels. A $19,000 6.4kw system. Of course, was looking like a great decision. It was the sunniest month of the year after all.
Now we have an extra half years data, including the worst of winter. How did we fare? Is it still worth it? Are we regretting the decision?
Stay tuned to find an answer to all these questions!
How much solar power did we produce?
Between February and July we averaged 604 kWh per month. June the worst month at 323kWh, which equates to just 10.8 kWh per day.
Solar power production per month (Feb to July 2024)
Of the 604kWh, we consumed an average of 284 kWh, which is 47% of total solar production. The other 53% (320 kWh) we sent back to the grid as we didn’t use or need it.
How much power did we consume?
Electricity use per month (Feb to July 2024)
My estimations when weighing up the pros and cons of getting solar panels, included using a power consumption average of 875 kWh per month. That is almost exactly where we have landed after 6 months. 1 month of summer, a full Autumn, and 2 months of winter. I would expect solar prodcution and electricity consumption to be the same, if not better than the current average due to the next 6 months being warmer (and potentially sunnier) than the last 6 months.
Of the 876 kWh electricity use, 592 kWh has come from the grid and 284 kWh from solar production. That equates to an average of 68% from the grid and 32% from solar. This number got as high as 78% in June and July and as low as 45% in February. Easier to use a higher percentage of solar when there is less of it.
How much has our power bill been with solar panels?
Power bill with solar panels (Feb to July 2024)
May look pretty normal to many (in particular the winter months). We are a very power hungry household though. We have a lot of electrical appliances for work and security and home automation. We also work from home. Plus we have two young kids that go through washing like it is out of fashion. All that is to say the actual power bill is not the important part here. What is more important is how much we would have paid if we didn’t have solar panels. The savings.
How much have solar panels saved us in the last 6 months?
Monthly savings ($) from solar panels (Feb to July 2024)
Monthly savings (%) from solar panels (Feb to July 2024)
Total 6 months savings of $927 had we not had solar panels. 47% less than we could have been paying otherwise.
When we were first weighing up the decision to buy solar panels or not, I was hoping for savings of between 50-60%. We are a bit under target there. However, one thing I did underestimate was the cost of electricity in the Northland region. It is more expensive here than the rest of the country, so savings made have been higher than expected. We expected $1,500 for the year, but it has been $920 (61%) in just half the time (6 months). So even though percentage savings are a bit less than hoped, dollar savings are right up there.
A few things I hope will change the percentage savings.
One, after living our whole lives without solar panels, we are still adjusting to using our appliances smartly. Old habits die hard and we are still not really thinking about when we are using appliances to make the most of the sunshine. We hope our behaviours change for the better as we adjust.
Secondly, I believe February to July are worse months on average than August to January sunshine wise. I am hoping we see some improvement in solar production in the next six months.
Thirdly, power prices will only go up from here. That will increase our savings over time. Right now, the cost of electricity is the lowest it will ever be. This will speed up the payback period even more so.
We have almost recovered 5% of the cost of the $19,000 solar panels in 6 months.
Because we financed the solar panels from a mortgage free loan, we have no opportunity cost for that $19,000. It wasn’t ours to begin with. Sure, we have to pay back the loan at a rate of $317 a month. But investing that $317a month instead would only yield around $90 a year at a 5% return. So that does take some of the gloss off the returns of solar panels but not much. You always need to think about the opportunity cost of your money. But we are also saving $150 a month in power bills, so need to include those savings if invested too, which is $50 a year by not investing, rather than $90. Not a major difference.
Hopefully our savings after 1 year will be 10% of the cost. This should mean we are still on target for an 8-10 year payback period. As power prices increase, the cost of savings will only increase year on year.
Thanks for reading, and don’t forget we do have a solar panel payoff calculator on our website here if it is something you were interested in.